Chapter One- What Economics is About

Chapter One- What Economics is About - School of Hotel...

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School of Hotel Administration HADM 1141: Microeconomics for Service Cornell University Fall 2008 Chapter One: What Economics is About o Goods and Bads A good is anything that gives a person utility or satisfaction A bad is something that gives a person disutility or dissatisfaction o Resources It takes resources to produce goods Economists divide resources into four broad categories: Land Includes natural resources (raw materials) that come with the land Labor Physical and metal talents people contribute to the production process Capital Produced goods that can be used as inputs for further production Entrepreneurship Particular talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities and develop new ways of doing things o Scarcity and a Definition of Economics Scarcity: the condition in which our wants (for goods) are greater than the limited resources available to satisfy those wants Economics: the science of scarcity Scarcity effects The need to make choices We must choose which wants we will satisfy and which we will not The need for rationing device A means of deciding who gets what Dollar price is a rationing device
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Chapter One- What Economics is About - School of Hotel...

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